Specialist lending helps customer pay £60k tax bill.
Self-employed Danielle Wright was devastated when her husband left her saddled with a £60,000 tax bill from the business they had previously run together.
|Loan type||Amount||Term||Loan-to-value ratio|
|Residential remortgage||£63,000||20.5 years||13.7%|
Although she had taken steps to repay the arrears to HMRC, charges were building up until her monthly repayments had soared “substantially”, leading to a huge amount of stress for the former company director.
On top of this Danielle had been left with £2,000-a-month outgoings when her ex-partner left. By her own account the situation became a “horrible mess”.
Because of her self-employed status and a black mark against her credit profile, she believed she would not be able to borrow the money needed, despite her owning a £420,000 home.
“I thought I’d never get a mortgage,” said Danielle, who runs her own broker business. “My credit history and previous three years’ income were not great, but it was really frustrating because I could prove I could afford the mortgage.
“The £60,000 was a hangover from the partnership I’d had with my ex-husband. I’d sold my previous house but, with charges added to the tax bill, I just didn’t have enough.
“The worst thing about it was the stress; and the uncertainty was corrosive.”
Unfortunately, Danielle’s position is far from unique. The Intermediary Mortgage Lenders’ Association (IMLA) has identified a record number of county court judgements - 912,000 – against people with poor credit in 2016, a rise of almost a quarter on the previous year.
Their situations are often made more difficult because of a divorce or relationship breakdown which, as this case highlights, can magnify existing money problems, making it even harder to secure finance.
This issue has been further compounded by the fact that mainstream lenders such as banks have significantly tightened their lending criteria, and often rely solely on the borrower’s credit file, rather than looking at each case on its merits.
However, Danielle did have options. Through her work in financial services, the self-employed businesswoman was made aware of ourselves and contacted one of our mortgage advisors after looking at our lending criteria.
She said: “As a broker who knows the market really well, I knew that I wouldn’t get a mortgage from a mainstream bank. Together looked at affordability and I could prove that I could afford the repayments, so that wasn’t a problem.”
After our underwriters carefully assessed Danielle’s case, we agreed to provide the finance needed through a 20-year mortgage, which she took out jointly with her new partner, dramatically reducing her monthly outgoings.
Danielle said: “I’ve now got the mortgage and the tax bill has been completely paid off. I won’t be hearing from the HMRC about it again, which is amazing, and I’m able to get on with my work and my life.”
Although we endeavour to lend within the shortest possible timescales, this is not always achievable in 100% of cases.